Exam 16: Developing Pricing Strategies and Programs

JJ pays overhead each month, including his company's bills for rent, heat, interest, and salaries, which are examples of ________ costs.

In which of the following auctions does the auctioneer first announce a high price for a product and then slowly decreases the price until a bidder accepts?

Price discrimination in all forms is illegal in the United States.

Costs that differ directly with the level of production are known as ________ costs.

Market skimming pricing makes sense under all the following conditions, EXCEPT if ________.

In which of the following forms of countertrade do buyers and sellers directly exchange goods, with no money and no third party is involved?

When museums charge a lower admission fee to students and senior citizens, this form of price discrimination is known as ________ pricing.

When Juan's company introduced its new product in the market, it introduced it at the lowest possible price assuming that the demand for the product is going to be highly responsive to the introduction price. It also believes that a higher sales volume will lead to lower unit costs and higher long-run profit. What can be said about the company's objective?

After determining its pricing objectives, what is the next logical step a firm should take in setting its pricing policy?

Customers usually have a lower price threshold below which prices signal inferior or unacceptable quality, as well as an upper price threshold above which prices are prohibitive and the product appears not worth the money.

What are some ways to respond to overdemand?

________ pricing takes into account a host of inputs, such as the buyer's image of the product performance, the channel deliverables, the warranty quality, customer support, and attributes such as the supplier's reputation, trustworthiness, and esteem.

Which of the following is NOT one of the possible consumer reference prices?

A toaster manufacturer who has invested $1 million in the business wants to set a price to earn a 20 percent return on investment, specifically $200,000. What pricing method should it choose?

When hotels drop their rates on the weekends, this form of price discrimination is known as ________ pricing.

When hotels, motels, and airlines offer discounts in slow selling periods, they are said to be offering ________.

What are the different types of price discounts and allowances?

________ cost is the cost per unit at that level of production; it equals total costs divided by production.

Price elasticity magnitudes are lower for durable goods than for other goods.

Caterpillar uses target-return pricing to set prices on its construction equipment, and justifies a higher price by showing lower lifetime operating costs.